Add bacon to a large skillet over medium heat and cook until crisp. Remove bacon from skillet and set aside.
In the same skillet, add sugar and flour and stir together. Add in onion, water and vinegar. Cook over medium heat until thickened, about 3 minutes, stirring constantly.
Crumble bacon and add to skillet. Add in cabbage and stir until coated in sauce. Cook for 4 to 5 minutes or until cabbage is softened. Serve hot.